Subject : Conditions for Purchasing a Property through an Investment Firm

Fatwa Number : 882

Date : 25-07-2010

Classified : Usury (interest) &Loans

Fatwa Type : Search Fatawaa

Question :

What are the conditions for purchasing a property through taking out a loan from an investment firm? In addition, is it permissible that the loan value be higher than the property value?

The Answer :

Praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

Purchasing property through an investment firm takes two forms:

First: It is done through Murabaha transaction in which case it is permissible so long as the Sharia conditions clarified in Fatwa No. (442) are met.

Second: It is done through taking a usurious loan in which case it is strongly forbidden because the Messenger of Allah (PBUH) cursed the one who accepted usury, the one who paid it, the witness to it, and the one who recorded it. And Allah the Almighty Knows Best.

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